March 20 (Reuters) - Goldman Sachs lowered its 2023
economic growth forecast for the euro zone on Monday, citing
ongoing stress in the global banking system and an increase in
economic uncertainty.
The investment bank said it sees a 0.3% hit to the euro
zone's real gross domestic product (GDP), reducing the growth
forecast to 0.7% for 2023.
It added that it sees no economic growth in UK this year and
no longer expects the Bank of England (BoE) to hike its policy
rate in May, leaving its terminal rate forecast for BoE at
4.25%.
Global financial markets have been rattled by the collapse
of some regional U.S. banks and the larger Swiss lender Credit
Suisse, along with interest rate hikes by major central banks.
Goldman Sachs said there might be a tightening in bank
lending by around 10 percentage points in both the euro area and
the UK, due to banking stress and rise in financial spreads.
(Reporting by Siddarth S in Bengaluru; Editing by Varun H K)
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